How Banks Are Protecting Consumers from Bank Data Fraud

Passive behavioral authentication is the most productive way to gather this information with minimal effect on user experience, without creating unnecessary pressure on the customer.

Fremont, CA: The advancement of technology has given rise to fraud. In 2020, fraud and cybercrime have only increased across the world. However, financial institutions are now focusing on controlling fraud in order to improve the consumer experience.

The APP voluntary code was introduced to provide users with greater protection against such scams. This involved the allocation of funds to customers who were victims. Banks have significantly increased their efforts to educate their clients about fraud as a result of the implementation of the code. For instance, when introducing a new payee, it is now increasingly normal to receive a pop-up alert on a banking app informing the customer of possible fraud. There are, however, two problems hindering the progress of banks in getting consumers to take notice: the messages are sent at the wrong time, and customers dismiss them, taking the message as an irritation. When making online purchases, consumers now have to manage a world that consists of generic and impersonal emails and pop-ups, meaning the code has potentially harmed the user experience. Banks do their best to warn their clients of the threats, but they are often simply overlooked.

First, to detect and combat threats in real-time, companies can aim to leverage greater intelligence around user behavior. This includes introducing a solution that gathers thousands of customer data points to compare identity characteristics such as behavioral, unit, location, and telecoms. The data of the person is then combined with other threat detection tools (for example, is there any malware present on the computer of the user?) evaluated using machine learning and intelligence models to provide a trust score that the user is who they say they are and that when making the transaction their behavior appears normal.

Passive behavioral authentication is the most productive way to gather this information with minimal effect on user experience, without creating unnecessary pressure on the customer. Passive behavioral authentication, such as keystroke dynamics and mouse movement analysis, recently approved by the European Banking Authority (EBA) for strong customer authentication in line with PSD2, helps to validate the user's identity without the need for additional active authentication tests. By eliminating the need for intrusive authentication measures, this offers the right combination between usability and protection unless a cause for concern is raised.